Sam's Journal

[asap531]

Time to kick off my journal!

Here's a bit of background on where I currently stand:

Cash: $36,000
Mortgage (investment property): $217,000
College debt: $29,500
US Shares: $7,000

As you can see, I'm still well and truly in the red (not accounting for the price of the house, which has appreciated quite well over the last 2.5 years).

Inflows:
- Full time job: $90k + 11% superannuation p.a. (started career 9 months ago)
- Rental income: $13k p.a.

Outflows:
- Housing: $0 (living with my parents)
- Food: $500 p.a. (I expense a lot of meals to my company/live at home)
- Travel: $0 (expense to company)
- Car: $2,000 p.a.
- Interest on mortgage: $11k p.a.
- Health insurance: $0 (paid by company)

As you can see, I don't have many costs at the moment.

I've built an excel model to track my net assets and savings rate and use the outputs from PocketBook (essentially a lame version of Personal Capital for Australia) for the data.

Still working on refining the model and the inputs (given I expense a lot of items to the company, it's hard to keep track of what's actually hitting my bottom line).

I plan to post outputs from the model monthly, kicking off in May.

The current question I'm pondering is: Should I pay down the debt, or invest the capital elsewhere?

Sam

[GandK]

Welcome!

What's the interest rate on the debt?

[asap531]

4.8% (variable).

[GandK]

Generally speaking, you want to weigh the interest rate you'd receive against the one you'd pay, and focus on the higher of the two.

If it were me, I'd pay off the debt first. "Variable" makes me nervous. I'm on the conservative end of the investment spectrum in this forum, though. Some of the people here would probably counsel you to do the opposite.

[Dragline]

Yeah, I would say I'm not sure you need that much cash lying around with your low expense level, unless you are eyeing a particular investment.

If not, you could use some of it to pay down the debt or at least pay it a little faster.

[asap531]

I'm actually using an offset account against my mortgage, which means that I can reduce my interest expense while retaining cash liquidity.

Really neat concept, because if I find an investment that promises a better return, than I can easily shift my cash into that.

[andystkilda]

You could refinance to a lower variable rate - Loans.com.au or UBank for example are in the low 4's. Break costs/discharge fees would be minimal if you're all variable currently.
Also if it's an investment your better off overall not paying down the debt and not having anything in the offset (if you have one) - keep the deductible debt as high as possible and invest your cash elsewhere.

[asap531]

Here's my first monthly post

May 1: Baseline!

Assets
Cash: $40,073.60
US Shares: $6,934.12
USD: $403.65
Super: $6,952.50
Property: $217,000.00

Liabilities
Mortgage: -$217,000.00
Student loan: -$29,442.00

Net worth: $24,921.87

I'm tracking my expenses using Pocketbook and an Excel spreadsheet, so over the next month, I'll get a really good view of where my $$$ are going

Sam

[asap531]

Taking a leaf out of J Money's book (budgetsaresexy.com).

Probably easier to read this as well.

[asap531]

Will be posting another update in a week.

Looked at my financials yesterday and it looks like my biggest expenses are fuel (~$100) (that's Australian for gas) and food (~$100).

Will likely be closing the month with net outflows of about $300.

[fucash]

Hey mate, fellow Melbournite here.

Looks good in here! Following along

Nice income you got started with! What do you do if you don't mind me asking?

Very lucky to have the living at home situation in this city ...Rent for me is huge a huge chunk of spending.

[asap531]

Latest update following the month of May.



Summary:
- Huge uplift in net worth caused by house being valued at cost price (I had accidentally discounted it last month, so we can pretty much ignore this change)
- I've brushed the impact on overall net worth so that I can get a better view of my actual cash change.
- Increase in net worth of $5,179, which is fantastic
- This represents a savings rate of 78% and doesn't account for the change to my superannuation (will update that each quarter)

[asap531]

Hey mate, fellow Melbournite here.

Looks good in here! Following along

Nice income you got started with! What do you do if you don't mind me asking?

Very lucky to have the living at home situation in this city ...Rent for me is huge a huge chunk of spending.

I'm a management consultant - joined the firm in a graduate position about 10 months ago.

Nice to see some more Melbournians interested in ERE

Living at home has its downsides - my commute into the city takes about 1.5 hours (one way!) -.-

[fucash]

Damn, 90k as a grad... Well done!
Is this a boutique firm or a giant? (BCG, Bain, Booz etc). I have some experience (2.5years) with a large firm myself.

That commute does sound like a little bit of a pain in the arse -- I live 3 minute walk from work... No joke.

'Career' started 3 years ago and on about $83-85k now... still a little blown back by $90k grad salary!

[asap531]

Damn, 90k as a grad... Well done!
Is this a boutique firm or a giant? (BCG, Bain, Booz etc). I have some experience (2.5years) with a large firm myself.

That commute does sound like a little bit of a pain in the arse -- I live 3 minute walk from work... No joke.

'Career' started 3 years ago and on about $83-85k now... still a little blown back by $90k grad salary!

With one of the giants.

The salary is inclusive of my first year and signing bonus (base salary is a little bit lower).

Oh man, 3 minutes from work sounds amazing.

I've always been so conflicted - can't work out if I prefer the additional savings boost from living at home vs sleep time.

[fucash]

With one of the giants.

The salary is inclusive of my first year and signing bonus (base salary is a little bit lower).

Oh man, 3 minutes from work sounds amazing.

I've always been so conflicted - can't work out if I prefer the additional savings boost from living at home vs sleep time.

RE: Giants - good work, mate!

Won't lie, 3 minute commute is awesome. Although, when I was consulting I was always travelling, so I know the feeling of rushing in the morning.

[asap531]

June updated coming in the next few days.

A bit disappointed, because I think I spent ~5-10 times as much compared to May (new phone - dropped my existing phone in the loo and medical bills blew the budget out of shape).

Buying a lot more petrol/gas as well, and oil prices haven't helped.